LPs are more bullish than VCs give them credit for As the ultimate source of capital that 昀氀ows downstream via VCs to startups, Limited Partners (LPs) play a critical role in the healthy functioning and success of the European tech ecosystem. The scale and predicta- bility of capital 昀氀owing from LPs is itself shaped by the appetite and willingness of these institutional inves- tors to allocate to the venture asset class on a consistent basis. As a result, LP sentiment is a crucial barome- ter to understand current and future appetite to invest. This year’s survey highlights a notable increase in the share of LP respondents who reported a decreased ap- petite to invest in the European venture asset class compared to prior surveys, increasing to 20% of respond- ents from 8% last year and just 2% in 2021. More notable, however, is the fact that just as many LP respondents 18% reported an increased appetite, while the majority 62% reported no change in appetite. This likely re昀氀ects the fact that many LPs understand the importance of investing consistently through all stages of the cycle and the fact that, perhaps counterin- tuitively, a market downturn may actually represent a more attractive phase to allocate to the asset class. What really stands out, however, is the huge gulf in perception between LPs and VCs. As many as 71% of VC respondents to the survey stated that they have noticed a decreased appetite from LPs compared to 12 months ago, clearly highlighting the headwinds that VCs perceive are creating challenging fundraising con- ditions. This represents an almost doubling in VC respondents highlighting decreased LP appetite since last year’s survey and is more than 3x higher than the responses shared by LPs themselves. In the past 12 months, has your firm's appetite to invest in the European venture asset class changed? In the past 12 months, to what extent has your firm noticed a change in appetite for European venture investment from LPs? Decreased appetite Stayed the same 100 Increased appetite 75 s t n e d n o p 50 s e r f o % 25 0 1 2 3 1 2 3 2 2 2 2 2 2 20 0 0 20 0 0 2 2 2 2 Notes: LP VC VC and LP respondents only. Respondents who selected "I don’t feel su昀케ciently informed to comment" are excluded Sources: from the data. 191 | Fundraising